Objectives

These are short term and specific intentions of various operational units of the organisation. They are often called “targets” and are the major key elements in short term plans. They are usually incorporated into the annual budget of the organisation. They represent the intended outcomes of the organisations efforts to meet the day to day needs of the customers and other stakeholders.

Classification of objectives

•    Profitability:- The primary objective or profit earning companies and is accepted as being growth in earnings per share. At the planning procedures the objective for earnings per share will need to be translated into targets for control linking sales, profit an capital employed. The company wants to survive so as to make a profit or to maximise the wealth of investors in the company i.e. shareholders.

•    Survival:- It is an implicit, overriding objective in every organisation even though it is rarely talked about. The first six months in the life of a company are crucial:- its brands are unknown, its advertising campaign has a little probability of making any impact there are no repeat orders and the organisation structure will still be at its formative stage.

However survival at infancy is not guarantee to success. Economic recessions and activities of competitors will threaten an established company and may cause it to re-examine its capacity for long-term survival. Survival should not be at any cost especially when the asset bases has been shrinking as a consequence of high interest rates with no improvements in the foreseeable future or heavy losses. Under these circumstances its assets base will erode until it has zero value at which time it is likely to be technically insolvent.

•    Customer satisfaction/create customers:- The aim of the marketing function is to generate enough satisfied customers to ensure a profitable existence for a company by endeavouring to establish and then supply the needs of its target customers, rather than offer a product for which there is insufficient demand.Satisfaction increases as the quality increases and prices fall.

•    Innovation:- The board must determine whether it intends to lead in developing technology and products, to follow other companies or to design to customer needs. Its ability to innovate is governed by its technical and creative resources.Financial and physical resources: finance will be needed to make the other objectives possible and objectives under this reading will include:- the amount of capital to be raised from external sources and the form in which capital will be raised.